Tag Archives: politics

Carbon tax

Our regular guest writer James Glover (@zebra) returns to the Stubborn Mule today to look at the real cost of carbon tax…and who pays the cost.

It is no surprise that the latest Newspoll shows the Labor Government sinking under a concerted attack by the Opposition, and its supporters in the media, over the Carbon Tax. The incessant cry of “a great big new tax” was bound to have an effect on the marginal voters who derive their political views in atavistic ways. In fact most of the political arguments lately recently seem to revolve around the distinction between levies and taxes. The trick seems to be if your opponents propose it then it is a tax and if you propose it is a levy—the latter being used by both sides to describe variously the flood levy (Labor) and the parental leave levy (Coalition). Taxes, as opposed to levies, apparently lead to profligate spending and are downright un-Australian. It makes you wonder what they use to fund hospitals, schools and roads.

So how does the Carbon Tax work? And what does it mean to say it is “revenue neutral”? Is it really a tax or “not really a tax” as the Treasurer, Wayne Swan, claims? Suppose the government wants to set up a Carbon Tax for the purposes of reducing carbon emmissions. It does this by imposing a tax (or levy or fee) on the price of goods and services that are deemed to ultimately cause high but avoidable (hence no agriculture) emissions of carbon. This of course raises the price of these goods e.g. electricity. If we impose a Carbon Tax on coal-generated electricity (the sine qua non of carbon emitters) then expect the power companies to pass on all or most of the increase to consumers. Now here’s the thing, the money the tax raises will have gone to subsidise the increased power bills of these very same power consumers. By exactly the same amount as the price should rise. So in effect nothing happens. In other words, at a base level the Carbon Tax does nothing. It has no benefits and no costs. Isn’t it really “a great big snooze tax” and not “a great big new tax”?

The Carbon Tax has one (fully intended) important consequence. If power emitters want to increase their profits they can do so by switching to lower carbon emitting alternatives. These might already be available or they can pay to research and develop them. And because of the tax what was previously uneconomic will now be made viable. Since these alternatives are really more expensive than coal-based power, without the tax, you might ask what is really happening at the cost end. It seems like a tax which costs nobody nothing, magically makes alternatives to carbon emitting industries economic. Voila!

Well that’s what the government would have you believe. On closer examination though it is precisely when the Carbon Tax has its intended effect that the cost gets passed onto consumers. But not when the Carbon tax is first introduced. To see why let’s have a look at an example.

Suppose the cost per unit of producing electricity from coal is $100. The power company charges $110 to consumers and so makes a $10 profit. The Govt introduces a 20% Carbon Tax on the cost of producing electricity using coal. This raises the price to $130 in order for the company to maintain its $10 profit margin. That’s $100 for the coal, $20 for the tax and a profit of $10. The extra $20 gets passed onto the consumer whose bill is now $130 per unit. However after the $20 subsidy (paid for by the $20 proceeds of the tax) they still only pay $110.

In other words: the producers, the consumers, and the government are no better or worse off immediately after a Carbon Tax is introduced. But what happens if the Carbon Tax is successful in reducing emissions? That is when consumers end up paying more. The cost to the company, including the tax, of producing one unit of electricity is $120. Suppose an alternative non carbon-emitting energy source is found which costs $115 per unit. This is more than the coal-based cost before the tax, but less than the cost with the Carbon Tax as this carbon-free energy source, let’s call it “sunshine”, attracts no Carbon Tax. So the company, in order to maintain their profit of $10, charges $125 per unit, less than coal based power with a Carbon Tax. But now the consumer receives no subsidy either so even though their total bill has dropped from $130 (with carbon tax and a subsidy) to $125 without a subsidy. It now actually costs them $125, an increase of $15 over the cost before the carbon tax was introduced and even immediately afterwards. This of course is the extra $15 per unit that it costs to produced electricity from sunshine rather than coal.

That is how the Carbon Tax really works and ends up costing the consumer. You start out with a Carbon Tax which costs nobody anything and end up without a Carbon Tax that everybody ends up paying more for. When it has its intended effect, and there is no coal based power, but also no more money for subsidies. And, in principle, no more carbon pollution.That of course though is really the point. There is a (currently) hidden cost of producing carbon as carbon dioxide and methane in global warming and that is, if the system works, the $15 extra you pay to solve the problem by removing carbon from the economy.

Holiday reading

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My now traditional annual pilgrimage to the South coast of New South Wales saw the rainiest weather I can remember. While it was nothing on the scale seen in Queensland and Victoria over recent weeks, it did take its toll on some of the wildlife: we saw dozens of dead porcupine puffers washed up on the beach, apparently the victims of an algal bloom triggered by the rains. On the plus side, the lack of sunshine did help me to catch up on a bit of overdue reading, including a review copy of a Beginner’s Guide to R which you can expect to hear more about when I manage to finish writing the review.

I also read two books about climate change, which were very different in style and content.

Merchants of Doubt

The first was Erik Conway and Naomi Oreskes’ Merchants of Doubt (How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming). The book is not really about climate change per se, but rather the modus operandi of a number of key climate skeptics. In the process it sheds some interesting light on a question I considered here on the blog about a year ago: why does belief or disbelief in the reality of climate change tend to be polarised along political lines? Most of the protagonists in the Merchants of Doubt are scientists, many of whom were physicists involved in the original US nuclear weapons program. The thesis that Conway and Oreskes build is that these scientists were committed anti-Communists and as the Cold War began to thaw, they saw threats to freedom and capitalism in other places, particularly in the environmental movement. That, at least, is the explanation given as to why the same names appear in defence of Ronald Reagan’s “Star Wars” missile defence scheme, in defence of the tobacco industry (first arguing against claims about the health risks of smoking, later about the health risks of second-hand smoke), dismissing the idea of acid rain and finally casting doubt on claims of human-induced climate change.

While I would not expect the book to sway any climate change skeptic, it should at least encourage people to think a bit harder about messengers as well as the message. It certainly prompted me to do just that. When reading the chapter on the second-hand smoke controversy, I immediately thought of an episode of the Penn and Teller’s very entertaining pseudo-science debunking TV series Bullshit*. The episode in question, as I remembered it, did a convincing job of portraying the risks of second-hand smoke (SHS) as dubious at best. Watching it again was eye-opening. Looking past the scathing treatment of the anti-SHS activist, I focused instead on the credentials of the talking heads who were arguing that the science was not settled. The two main experts were Bob Levy from the Cato Institute, a libertarian think-tank, and Dr Elizabeth Whelan, the president of the American Council on Health and Science.

Levy’s voice immediately suggests he is a smoker, which does not, of course, disqualify him from questioning the science of SHS. More intriguing is the fact that the Cato Institute regularly appears as a company of interest in the Merchants of Doubt. Conway and Oreskes draw a number of links between the Cato Institute and both the defence of the tobacco industry and skepticism of global warming, particularly in the person of Steven Milloy who, before joining Cato, worked for a firm whose main claim to fame was to provide lobbying and public-relations support for tobacco giant Phillip Morris.

As for the American Council on Health and Science, it sounds at first like some kind of association of health professionals (which is presumably why Warren chose the name). It is in fact an industry-funded lobby group…sorry, I mean an independent, nonprofit, tax-exempt organisation. Exactly how much of their funding comes from where is now shrouded in mystery, but here are the details as of 1991.

Of course, scrutinising the backgrounds Levy and Whelan does not prove that their claims are wrong. It does, however, raise the question of why Penn and Teller did not interview anyone more independent, perhaps even a scientist, who expressed the same doubts.

What’s the Worst That Could Happen?

The second book on climate change that the rain helped me to read was Greg Craven’s book What’s the Worst That Could Happen?. I bought this after watching Craven’s amusing, if flawed, video “The Most Terrifying Video You Will Ever See”. Craven, a high-school science teacher in Oregon, has clearly workshopped the issue of climate change extensively with his students and the insight he wants to share in his videos and his book is essentially that the whole problem can be viewed from a game-theoretic perspective. Rather than trying to decide what is true or not (are the skeptics right or are the warmers right?), the important question is should we be acting or not.

Craven’s Global Warming Decision Grid

In his video, Craven uses an action versus outcome “decision grid” to argue that the consequences of not acting in the event that global warming turns out to be true are worse than the consequences of acting (i.e. economic costs) if it turns out to be false. The argument is entertaining, but unfortunately flawed. The problem is that it can be applied to any risk, however remote. As he writes in the book:

Simply insert any wildly speculative and really dangerous-sounding threat into the grid in place of global warming, and you’ll see the grid comes to the same conclusion–that we should do everything possible to stop the threat. Even if it’s something like giant mutant space hamsters (GMSHs).

The book is an attempt to rescue his idea by developing a series of tools to help sift through the arguments for and against climate change without having to actually understand the science. Along the way, he includes an extensive discussion of confirmation bias which I enjoyed as I am fascinated by cognitive biases. Ultimately though, his conclusions rest on an argument from authority. While he makes an excellent case for the important role that authority plays in science, this approach will not win over the skeptics I know: I can already hear their riposte in the form of the establishment’s rejection of Albert Wegener’s theory of continental drift.

Skeptics aside, What’s the Worst That Could Happen? is an extremely accessible book (perhaps even too folksy in its style for some) and is probably best read by those who are not already entrenched in one camp or another and are just sick of the whole shouting match.

* Long-time readers may remember that Bullshit has been mentioned on the blog before in this post about bottled water.

A way with words

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Sometimes the things that are unsaid are far more telling than the things said.

I had cause to reflect on this when I stumbled across a book on my shelves that I have not opened for many years. The book, entitled “Deutsche Bank: Dates, facts and figures 1870-1993”, is an English translation of the year-by-year history of the bank compiled by Manfred Pohl and Angelike Raab-Rebentisch. In keeping with the title, the style is more bullet points than narrative. Nevertheless, I continue to find the pages spanning World War II strangely fascinating.

In 1938, with the connivance of the French and British, Germany annexed Sudetenland in Western Czechoslovakia. For Deutsche Bank, this meant more branches.

The following year, Deutsche Bank was fortunate enough to be able to continue its branch expansion, this time into Poland. At least this time, there is a mention of the events outside the bank that may have been relevant.

Another year, and some more expansion for the bank including a few branches in France. No need to mention the invasion of France here, of course.

From 1942, outside events start to interfere with the bank: the “impact of war” forces rather inconvenient branch closures.

To see these extracts in the full context, here are the pages spanning 1934 to 1940 and 1940 to 1946.

Playing with trains – a North-West rail link

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Not content with scrutinising the plan for a National Broadband Network in Australia, guest contributor @pfh007 has now turned his analytical beer coaster to a network of a different sort: a railway network.

There is a Ph.D. for the taking by any researcher who is able to unlock the evolutionary origins of the propensity of young children (and many older people) to be mesmerised by trains, even the generic suburban variety. You can see the rush of endorphins on the faces of weary commuters as an express service roars past within a metre or two of their aching feet. People seem to have a railway gene.

During the 1970s and early 1980s, the annual model train exhibition held in the Willoughby Town Hall in Chatswood was a highlight for the local kids. It took a full day to observe every detail of the elaborate models complete with green fuzz trees, fields of tiny cows and platforms full of frozen people and Hornby OO gauge recreations of famous rolling stock clattering around and around. Although remarkable as demonstrations of what can be achieved in a backyard shed, those models and their kin were probably responsible for turning large measures of the population into armchair rail network designers.

Consider this a contribution from one such Backyard Bradfield.

One of the striking features of the recent federal election was the ferocious response to the promise to complete the Epping to Parramatta section of the Chatswood to Parramatta line even though new (or finally completed) rail should be of immense appeal to residents of the area. It seems clear that the strength of the reaction was largely due to the failed rail promises of recent NSW political history. In short people were tired of having their railway gene tweaked for short term political advantage.

At one level it is hard to understand why building a new railway in Sydney is so difficult. Unlike the technological challenges facing the early railway builders in Sydney (see the ponies and pick axes in the photos at Museum Station) we have access to marvellous mole-like machines that can bore tunnels right through the Sydney sandstone. We also have advanced administrative systems for compensating people whose houses must give way to new surface track. Shanghai has been laying a new subway at a great rate over the last 15 years, so why can’t Sydney?

Could the problem be cost, even though modern technology and construction methods should have caused construction costs to fall over the last 100 years? Perhaps it is not so much the cost as the complexity of the financing arrangements, which have become too ‘elegant’. The Waratah train deal seems remarkably ‘elegant’ and yet, according to the press, it is poised for implosion.

I think the real problem is that these days we are spending too much time thinking about what we want rather than what a railway needs to be viable. That is we should decide to build a railway and then shape that part of the city to suit the railway. After all, if the majority of Sydney’s suburbs were designed around the car it is highly unlikely that they will be suited to a rail line without substantial modifications.

As the National Broadbank Network (NBN) has established back of the beer coaster calculations as a valid method of policy analysis, I will adopt that technique for some rough calculations of the North-West rail line viewed from the perspective of the needs of the railway.

Route

Using Google Maps, the following route seems reasonable in terms of not going too close to existing rail lines. The precise route is not critical as the demographics and structure of the suburbs will change to suit the new rail line by way of changes to zoning requirements.

Number of Stations: 15

Balmain, Drummoyne, Gladesville, Top Ryde, Denistone East, Eastwood (interchange with Northern Line), Carlingford (interchange with Chatswood-Parramatta Line), North Rocks, West Pennant Hills, Castle Hill, Kellyville, Rousehill, Box Hill, McGrath’s Hill and ending at Windsor.

Train Capacity

Capacity of the new Waratah trains is 896 seated (8 carriages) and, say, another 320 standing (20 in each vestibule) = 1,216 people in total per train

Peak Hour Capacity

The beer coaster is not very big so I will stick with peak hour only and peak “hour” is taken to extend from 6.15 am to 8.45 am, so 2.5 hours. We want a well-signaled, well-designed speedy network that can handle trains at 6 minute intervals. This means we can run 10 trains per hour. Thus the number of peak hour trains is limited to 25 trains.

25 trains in 2.5 hours can carry between 22,400 people (all seated) and 30,400 people (40 standing in each carriage) into the CBD.

I have assumed that during peak hour everyone gets on and travels to the city and everyone comes home by train at the end of the day. I have also assumed that every train going in the opposite direction during peak hour is empty

Station Capacity at Peak Hour

With a capacity at 30,400 people between 6.15 and 8.45 am and assuming that the load is spread equally between all 15 stations, each station will process 2,026 passengers during peak hour. Assuming they all arrive evenly spaced during peak hour, there would be no more than about 80 people on the platform at any one time.

Ticket revenue generated by Peak Hour Capacity

Assuming that everyone works about 46 weeks per year and no one uses the train for any other purpose the revenue generated by the new line (at $50 per week for a weekly ticket) is 30,400 × 46 × 50 = $69,920,000 (roughly $70 million per year)

Certainly people will use the rail line outside of peak hour, but as they will often be concession fares, etc. it is probably safer to do the sums on the basis of the peak hour capacity.

Out of that $70 million you will need to remove operating costs (say $25 million) leaving you with $45 million to pay down the debt used to construct the rail line. As $45 million would only produce a 6% return on $750 million worth of bonds and building the line would cost a lot more than that, there is quite a large shortfall to be found.

To give you an idea of how much that shortfall might be, the price tag for completing the Epping–Parramatta line is estimated at $2 billion. It seems likely that the cost for the full North-Western rail line would be well in excess of $5 billion. How do we cover the shortfall?

Remodeling the suburbs along the route

The beer coaster calculations make it quite clear that the finances of our beloved new railway are marginal even if we squeeze 1,200 people on trains running every 6 minutes non-stop between 6.15 am and 8.45 am.

That means we need a nice steady supply of warm bodies arriving at the station. Where will they come from? This is what demands the remodeling of the suburbs along the route. Unless there are sufficient people who can use the rail line we will not even get to the stage of trying to convince them to use it.

Finding 30,400 people in a Sydney of 4 million during peak hour can’t be that hard, can it?

Well yes it can.

It is worth keeping in mind that, currently, the inner West line in Sydney only runs about 4 services per hour in peak time and you can usually get a seat at Petersham, which is one of the closer stops to the city. That means that, even in the relatively densely-populated inner Western suburbs of Sydney, it would be a struggle to get anywhere near 30,400 people.

Walkers are unlikely to want to walk more than 15 minutes to the station. It may be that most people will only be willing to walk a shorter distance. A 15 minute walk at a brisk pace is only 1.5 km. That means that the walker catchment for each railway station will be a circle of radius 1.5 km.

Bus links and commuter car parks can help extend the catchment for each station, but when you are trying to get an average of 2,026 people to each station during the peak hour, that means a lot of buses or a rather large commuter car park for each station.

The only practical solution is to permit or, better still, encourage medium-high density housing for a 1.5 km radius around each of the 15 stations. Ideally this would be mixed office/housing/retail construction so that the inhabitants of the 1.5 km zone might get away without having a car at all.

On the assumption that only 20% of the people living in the 1.5 km radius will be daily commuters, we will need about 10,000 inhabitants in each 1.5 km radius to generate the 2026 passengers. That is quite a lot of houses or, more likely, apartments (say 5,000–2 people per dwelling).

The re-modeling will not require an army of town planners. Simply change the zoning rules for the 1.5 km radius around each station to allow medium-to-high density construction of approximately 5,000 dwellings and let the builders and developers of Sydney do the rest.

If this approach was applied to the other rail lines in Sydney we may find that we can deliver an enormous supply of new dwellings (apartments) over the years ahead without any increase in the area occupied by Sydney. This would allow the preservation of the market gardens on the outskirts, which currently supply much of Sydney’s vegetables.

Needless to say, an increased supply of dwellings where people want to live will go a long way to making housing more affordable in Sydney.

What about the shortfall between construction costs and ticket revenue?

It might be possible to increase the weekly ticket price, but I think $50 is probably a price that will not cause too much “sticker shock”.

It is hard to justify making people outside the railway catchment pay the cost as they will probably have their own rail link developments to fund. It seems reasonable that the shortfall between ticket revenue and paying the construction cost should be recovered from all the property owners in the railway catchment as the rail line will increase the value of their properties.

This could be done by imposing an annual State “infrastructure” tax on houses in the catchment for as long as it takes to retire the bonds issued to raise the construction capital (perhaps 20 years). The rate of the tax could vary depending on the benefit to the taxed property of the rail line.

For example: the 75,000 dwellings (15 × 5,000) within the 1.5 km radius of each of the 15 stations might pay $3,000 per year for 20 years and the 300,000 dwellings (I have no idea how many there are!) outside the 1.5km radius but still within the railway catchment might pay $750 per year for 20 years. This ‘infrastructure’ tax would raise $450 million per year. Add in the $45 million from ticket sales and the annual total of $495 million would pay 6% interest on about $8.2 billion worth of government bonds (or less for a non-government borrower). Taking into account repayment of principal as well over, say, a 20 year period, the debt $450 million could support would be closer to $5 billion.

Not quite there, as the construction cost is probably a lot more than $5 billion but at least in the ball park!

Is it all too hard?

The numbers above are all beer coaster figures, but they do suggest that better public transport has a real cost and involves changes that cannot be imagined away.

Survey after survey reports that Sydney is sick of congestion and wants better public transport, and yet I cannot recall too many attempts by our politicians (of any shades of the political rainbow) to lead the debate as to what better public transport may require of us in terms of contributing to its cost and accepting some changes to the car-flavoured landscape of Sydney.

Perhaps that is the real obstacle to improving public transport in Sydney.

Conclusions

If we want new rail lines, we need to think more about what they require of us rather than what we require of them.
If we are serious about better public transport, we need to be serious about increasing the density of Sydney’s population (although not necessarily increasing the total population).
The main obstacle to building new rail lines in Sydney is low population density.
Building a new rail line will require substantial remodelling/re-zoning of the areas within a 1.5 km radius of each station, preferably a mix of medium-high density housing/offices and retail.
One way of funding the cost of better public transport is a state infrastructure tax on the properties that benefit from better public transport services.
The next time you catch a train in Sydney, take along a beer coaster and count the people on the platform, the density of housing around the station, the frequency of services and the price of the ticket and then start designing your own preferred extension to the City Rail network
Some suggestions—Bondi Junction to Cronulla via Kurnell (tunnel under the mouth of Botany Bay), Northern Beaches, Parramatta to Hurstville, Chatswood to Dee Why, Hornsby to Mona Vale.
It the context of the above discussion, it is perhaps unsurprising that people are raising questions about the rationale for an expenditure of $43 billion on the NBN.

Photo credit: coverling (copyright Creative Commons)

A Delicate Balance

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Ever since Julia Gillard managed to wangle the support of two of the three country independents and scrape through to a second term in government, speculation has focused on how long the arrangement can last…and not only in the media but also on the Mule Stable.

Challenging though the road ahead may be for the new government, with so many different interests to juggle, I am of the view that Labor will do whatever they can to hold on to power. Even if they are unable to pass “crucial” legislation, they would be very unlikely to go to the polls early lest they lose the election. After all, if they did not have the courage to trigger a double dissolution when they failed to pass emissions trading legislation to combat the “greatest moral challenge of our time”, it is hard to see what issue could be important enough to them to jeopardise their power.

As for the independents, another election would risk their own new-found power. Furthermore, in siding with Labor they have not really promised very much. All they are committing to is to pass supply and to support the government in the event that no confidence motions are brought against it. On each and every particular piece of legislation they are free to horse-trade once more and potentially vote against the government. Also, as Bob Brown recently pointed out, there is nothing to stop the independents and the Greens backing legislation initiatives brought forward by the Liberals. So there really is no good reason for the independents to withdraw their support from Labor.

Without the numbers, the Liberals and Nationals are powerless to bring on an early election. So, this unlikely new coalition government is likely to be here to stay. The only scenario I can see that could undo Labor is a by-election. If one of the MPs supporting Labor were to fall under a bus, retire, disgrace themselves and resign or in some other way leave the Parliament, the Liberals would have the chance to win the by-election and chance the numbers on the floor. Failing that, I would expect to see Labor ruling for a full term.

What do you think? While it may take some time to see the result, this seems like a good opportunity for another poll on the Mule, so have your say!

More Informality

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Yesterday’s post on informal votes generated a lot of questions, both on and off the blog. One commenter was interested in understanding why there was so much variability in informal votes in New South Wales. It is a good question, and one I do not have an answer to. Presumably demographic differences across electorates (such as varying facility with reading English among non-native speakers) would come into play. But this still leaves open the question as to why the swing in informal votes varies so much across New South Wales. I will have to leave it to you to explore: the table below has the informal vote in all 48 New South Wales seats for your perusal. Let me know if you have any theories!

Division ID	Division	Informal (%)	Informal Swing (%)
107	Blaxland	14.22	5.33
251	Watson	13.57	4.48
119	Fowler	13.2	4.72
111	Chifley	11.09	3.18
315	McMahon	11.01	3.41
153	Werriwa	10.59	4.01
104	Barton	10.28	3.71
122	Greenway	9.47	3.29
144	Reid	9.21	3.63
140	Parramatta	8.73	2.11
103	Banks	8.55	2.79
127	Kingsford Smith	8.23	2.92
128	Lindsay	8	2.48
131	Macarthur	7.93	2.36
121	Grayndler	7.13	1.15
110	Charlton	7.11	2.44
150	Throsby	7.01	2.14
118	Farrer	6.85	3.02
124	Hughes	6.78	2.34
148	Shortland	6.58	2.42
105	Bennelong	6.51	0.29
117	Eden-Monaro	6.44	2.71
126	Hunter	6.23	1.96
146	Robertson	6.2	2.76
250	Riverina	6.11	2.22
115	Dobell	6.07	1.75
136	Newcastle	5.82	1.39
112	Cook	5.73	1.92
114	Cunningham	5.73	1.82
134	Mitchell	5.62	1.55
133	Macquarie	5.4	1.75
249	Paterson	5.37	1.77
149	Sydney	5.35	1.17
132	Mackellar	5.27	0.6
139	Parkes	5.25	1.17
120	Gilmore	5.24	1
145	Richmond	5.15	0.87
125	Hume	5.14	1.57
109	Calare	4.69	1.07
151	Warringah	4.66	1.22
137	North Sydney	4.62	0.9
138	Page	4.48	0.18
106	Berowra	4.44	-0.24
152	Wentworth	4.43	-0.47
113	Cowper	4.31	0.34
108	Bradfield	4.23	0.26
130	Lyne	3.67	-1.36
135	New England	3.6	0.63

An email correspondent asked whether it was in fact the 2007 election that was anomalous rather than the 2010 election, so I have also compared the 2010 informal vote to the 2004 election. Interestingly, the uptick in informal votes from 2004 to 2010 is indeed smaller. In fact, Western Australia had a lower rate of informal votes in this election than in 2004. New South Wales still shows significant increases in informal votes in a number of electorates, which helps drive a national trend. Overall, compared to 2004 there does still seem to be something going on with informal votes, but the effect is certainly less marked.

I also received various questions about whether correlations could be seen between informal votes and Green votes, whether the increase in informal votes was greater in more marginal seats and so on. Unfortunately, as yet my data mining has not revealed anything of substance. Here, for example, is the increase in the rate of informal votes versus the absolute two-party preferred margin. The regression lines show no simple relationship.

Informal Vote versus Two-Party Preferred Margin

Comparing Green votes to informal votes is just as unenlightening. That, at least, seems to make sense. While it is reasonable to consider some of the Green vote as a protest vote and some of the informal votes likewise as a protest vote, it may be that in some electorates more voters were inclined to protest by voting Green than informal, or vice versa. This would mean that there would be negligible correlation between the Green and informal swings at the division level.

So, despite my efforts, I am yet to squeeze further insight from the data. Of course I remain open to further suggestions! If you would like to do your own analysis, the current 2010 data is available from the AEC as is past data.

UPDATE: If you sort the table at the top by informal vote, you’ll see that the two electorates with the lowest rates of informal voting were New England and Lyne, the seats of the independents Tony Windsor and Rob Oakeshott respectively!

Also, here is a national table of informal votes (just to avoid being to NSW-centric).

Dress: Informal

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While Australia still waits to see which party will manage to scrape into power, the Australian Electoral Commission (AEC) has announced an investigation into the unusually high rate of informal votes. Veteran ABC analyst Antony Green observed that the rate of informal votes was the highest since 1984. Some are attributing the rise to the “Latham effect” following the exhortation by former Labor leader now professional provocateur, Mark Latham, that voters should spoil their ballots to thumb their noses at both major parties.

It will be interesting to see what conclusions the AEC draws, but there is no doubt that the informal votes in this election were significant.There are more votes to be counted and the trends in postal votes may differ somewhat from votes cast in person, but enough of the votes are in to get a reasonable picture of what has been going on. The figures here are based on the AEC data for the House of Representatives as at 23 August 2010. Informal votes rose in every state from the rate seen in the 2007 election, increasing by a margin of between 1.0% and 2.4%.

State	2007	2010	Change
NSW	4.95	6.87	1.91
NT	3.85	6.07	2.21
QLD	3.56	5.63	2.07
SA	3.78	5.54	1.76
WA	3.85	4.80	0.95
ACT	2.31	4.73	2.42
VIC	3.25	4.54	1.29
TAS	2.92	4.20	1.27

Informal Votes by State (%)

One way to visualize the changes is to plot the informal vote rate in 2010 against that of 2007. The chart below does this at a state level and also adds in a 45 degree line. Points falling above this line (as they all do) show an increase from 2007 to 2010, while points below the line would indicate a decrease.

Aggregating to a state level hides a lot of the interesting detail and can be misleading. For example, the ACT shows the biggest increase in informal votes, but with only two electorates, these figures have less statistical value. A more interesting picture emerges when the changes are shown by division. The chart below groups the changes by state, but plots points for each division*. Once again, 45 degree lines provide a guide as to whether informal voting rates increased or decreased.

Leaping out from this picture is the extraordinarily high rate of informal votes in some divisions in New South Wales. It is also striking that the rate of informal votes has increased in almost every division. At this point, there are only 4 divisions in the whole country (one in Victoria and three in New South Wales) to see the rate of informal votes drop.

It is hard to escape the conclusion that the increase in informal votes reflects a protest vote arising from deep voter dissatisfaction with both major parties. The Greens are pleased with the “Greenslide” they have experienced, but some of their success is likely to amount to the same voter protest, only expressed another way, rather than a permanent shift in commitment to the Greens.

* For the purists, there were changes to electorates between elections, and the chart only shows divisions which existed in both 2007 and 2010. Given changes to boundaries, some of these electorates are, strictly speaking, no longer perfectly comparable, but they have been plotted regardless.

Recognise this?

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Last night I was watching the Chaser’s Yes We Canberra (only a day late), and jumped out of my chair when I saw Craig Reucassel corner Tony Abbott to challenge him about his obsession with reducing Government debt. Have a look at this to see why!

Here is the post referred to in the video.

UPDATE: here’s a tweet from Craig on the topic of attribution (or lack thereof): http://twitter.com/craigreucassel/status/21647798173

Broadband Poll

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As a follow up to our guest post on the numbers behind Labor’s broadband policy, here is a quick poll to see whose policy you prefer. Let us know what you think!

When will Julia go to the polls?

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After taking Kevin Rudd’s scalp and now having done a deal with the miners, Australia’s new prime minister, Julia Gillard, is widely expected to call an early poll. The question is, when will the election be held?

As usual, my first inclination is to dig into the historical data. Looking at all of the Federal elections since Federation, December is far and away the most popular month for a poll. Although the election does not even have to be held this year, December is sufficiently far into the future that it fails to qualify as an early election. Unless the bounce Gillard has experienced in opinion polls proves to be extraordinarily short-lived, we should be looking at a somewhat earlier date. Interestingly, both July and August have only seen one election. On the admittedly spurious grounds of historical precedent, September would be a better bet.

Australian Federal Elections by month

But what of other sources of information? At the time of writing, the shortest odds from SportingBet were on August 7. In my own rather modest poll, August is also proving the most tipped month (it’s not too late to vote in the poll…just make your selection in the form below). No-one has voted for a date in July and I am inclined to agree that that is really a bit soon. Nevertheless SportingBet is still showing odds (admittedly long ones) for 31st July.

In a bid for contrarian status, I will diverge from both the bookies and voters in my poll and will tip a September election. But which date? History is not much help there. Of the four September elections in the past, there has been one on the 1st, 3rd, 4th and 5th Saturday of the month (1914, 1934, 1940 and 1946 respectively). So, I will veer as close as possible to the people’s choice of August, while still tipping September and predict that the election will be on Saturday 4th September. In choosing that date, I have not been swayed by the fact that the fourth Saturday of the month has been the most popular historically, other than to nominate 28th August as my fall-back selection.

Since I will most likely be wrong and you probably disagree with me, make sure to vote!